BAW to buy Lifan Auto producing arm

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The Chinese central government is pushing for the Chinese auto giants to merge, and become more centralized. It is obvious that many small players are not big or strong enough individually to confidently walk onto the world stage. Beijing Auto Works, with its seat in the nations political center, is flush with cash from it’s sucesful joint ventures with Mercedes, and Hyundai, and is therefore very eager to become a large player in the Chinese auto arena.

Media reports early this afternoon indicate that BAW are moving in to buy out Lifans automotive producing arm. Lifan are a privately owned company in the South West of China, and are more famous for their motorbike production, rather than their car production. It has always seemed like the automotive venture was more of an after thought for Lifan, but that has not stopped them from generating 13 billion RMB in combined sales revenue for motorbikes, and automobiles in 2008.

The American Insurance Group, AIG, took a 13.5% stake in Lifan for 90 million dollars late last year, making them one of the larger share holders in the company.